EUR/USD: inflation in Germany declined in March
The currency pair EUR/USD is under the influence of contradictory sentiment, testing the level of 1.0900 and the local peak of February 3. Earlier EUR showed a significant strengthening of positions amid market concerns about the banking crisis in Europe and the USA.
The previous day March statistics on consumer prices showed the success of the measures taken by the European Central Bank, which plans to hold another interest rate hike in 2023. Thus, Germany significantly slowed down the dynamics of inflation in the annual rate to 7.4% from the previous 8.7%, slightly exceeding the forecast of 7.3%, and in the monthly value it strengthened by 0.8%, continuing the February dynamics. The slowdown was also reflected in the harmonized figure, down to 7.8% from 9.3%, while the market was expecting a decrease of 7.5%. The published data reinforces confidence among European financial officials that the hawkish vector should be continued. Against this backdrop, an important speech was made by Isabelle Schnebel, a member of the ECB board, who said that the core inflation of the European Alliance, despite falling energy costs, and its decline is able to fully meet the preliminary forecasts. In turn, harmonized inflation in Germany fell to its lowest threshold since last April, indicating the formation of a strong downtrend. Investors also noted the positive consumer price data in Spain, where the dynamics of the harmonized index showed a sharp drop to 3.1% from 6.0%, beating expectations of a slowdown to 4.0%. Inflation statistics showed a low from August 2021.
- Resistance levels: 1.0900, 1.0957, 1.1000, 1.1051.
- Support levels: 1.0850, 1.0800, 1.0758, 1.0700.
USD/CAD: US Dollar remains at a local low
During the morning trading instrument USD / CAD demonstrates multidirectional dynamics, located at the minimum threshold for February 21 in the area of 1.3530.
During the current week, the U.S. dollar has developed a confident downtrend due to growing concerns of market participants, because threats of further crisis in the U.S. banking sector have decreased. Investors are fixing profits on some long-term contracts, refraining from acceleration of market activity, wishing to see the February personal income and expenditures data on Friday. At the same time, traders assessed the GDP growth for Q4 last year, which recorded a growth of 2.6% against the previous forecast of 2.7%, and the primary growth of 2.9%. The employment market disappointed economists as the number of initial claims for government grants in the seven days on March 24 rose to 198,000 from 191,000, missing the estimate of only 196,000, while secondary claims for the week of March 17 rose to 1.689 million from 1.685 million, with analysts expecting a rise to 1.697 million.
- Resistance levels: 1.3550, 1.3600, 1.3650, 1.3700.
- Support levels: 1.3500, 1.3450, 1.3400, 1.3350.
AUD/USD: moderate dominance of the "bulls" in the pair
The trading instrument AUD/USD retains a slight strengthening of positions, which will help the asset meet the end of the week with a slight increase. The currency pair is at 0.6720 and keeps getting stronger, having updated the local high of March 23.
The pair maintains a weak bullish momentum because of the dominance of the positive market outlook. Experts are going to evaluate the U.S. macroeconomic data block announced the day before on the dynamics of the personal income and expenditures. Earlier the statistics on the adjusted data on the US GDP for Q4 of the last year was published. The final estimate of the country's economic performance in Q4 increased to 2.6% against the previous 2.7%. Investors were left disappointed by another increase in unemployment benefit applications for the week of March 24 to 198.0K from 191.0K, with the market expecting 2.0K less. Repeat applications for government grants in the week of March 17 increased to 1.689 million from 1.685 in the past, with experts expecting a number of 1.697 million.
- Resistance levels: 0.6750, 0.6800, 0.6853, 0.6900.
- Support levels: 0.6700, 0.6650, 0.6624, 0.6600.
NZD/USD: GDP of New Zealand is declining
The currency pair NZD/USD is showing a weak trend around 0.6283, because the latest New Zealand macro statistics released showed declining economic data.
Thus, the level of approved applications for the beginning of construction works fell by 9.0% in February to January's decline of 5.2%, reaching an annual rate of 2,972 new residential properties, down 29.0% from the same period last year. Business confidence from the ANZ Banking Group of New Zealand and Australia for March remained flat at -43.4 points, contrary to economists' expectations of an improvement to -40.0 points.
- Resistance levels: 0.6310 and 0.6450.
- Support levels: 0.6240, 0.6100.